Renewable energy expansion could hinge on federal role in transmission

Expanding renewable energy production — a key goal for the incoming president — depends on expanding the network of power lines that carry electricity from remote areas where wind blows especially hard and sun shines particularly bright to population centers that need the power.

Key to doing that, some energy experts add, is giving federal regulators more authority in deciding where those power lines should be built. That has proven to be a tough sell politically in the past, however, and could again be an obstacle for President-elect Obama’s clean energy goals.

{mosads}Participants in the debate say resistance to federal siting authority has weakened as support for wind and solar power has grown, but the push is likely to be opposed by local officials worried that their state’s interests could be trammeled in the process, as well as by some environmental groups that fear federal regulators won’t be as careful in protecting sensitive wilderness habitats.

Lawmakers also will have to determine who will pay for a new interstate transmission system, a complicated issue that, if not handled with care, could further reduce support for federal siting authority.

What is uncontroversial is the need to build more power lines to accommodate new sources of renewable power and to maintain the current reliability of the grid, so that the lights come on when a switch is flicked. Electricity demand is predicted to grow by 17 percent in the next decade, and some areas already suffer from a lack of transmission capacity. The result is power lines clogged like highways at rush hour.

“Transmission lines are the critical link between new generation and customers, yet we continue to see transmission development lag behind generation additions,” said Rick Sergel, president and CEO of North American Electric Reliability Corp., which just released a 10-year reliability study. “Faster siting, permitting and construction of transmission resources will be vital to keeping the lights on in the coming years.”

Some industry representatives say the authority state and local officials have to block large transmission projects serves as a disincentive to investors who do not want to wait years before seeing a return on their capital.

Susan Tomasky, president of AEP Transmission, called the lack of federal siting authority the single “biggest obstacle” to attracting investors.

In 2005, Congress approved a modified federal siting provision that directed the Energy Department to designate corridors where transmission lines were already clogged and gave the Federal Energy Regulatory Commission (FERC) the power to intercede in projects built in those areas. Two corridors have been identified, one in the Mid-Atlantic region and the other in the Southwest, including in Arizona and California.

FERC has yet to intervene in either area, although Southern California Edison has asked it to after Arizona rejected a proposed line that would feed into California.

Rob Thormeyer, a spokesman for the National Association of Regulatory Utility Commissioners, which represents state regulators that would lose power under federal siting authority, said Congress should allow that process to develop before it intervenes again.

“We’re saying, ‘Let’s see how this process works before we throw it out of the window,’” Thormeyer said.

The process has already engendered some controversy. Reps. Frank Wolf (R-Va.) and Maurice Hinchey (D-N.Y.), members who represent two states that are part of the East Coast Department of Energy-designated energy corridor, tried to shut off money to DoE’s work on the corridor, claiming local and state views were ignored. Their amendment to an energy and water spending bill was rejected, despite support from groups like the Wilderness Society.

{mospagebreak}The 2005 law represented a step forward for advocates of federal siting. But Leon Lowery, a staff aide to the Senate Energy and Natural Resources Committee, said the fight took four years to win and by the time of enactment, the new law was already outdated.

Since then, political support for renewable energy has grown significantly. Obama, for example, supports a renewable portfolio standard (RPS) that would require utilities to produce 25 percent of their power from wind, solar, geothermal and other renewable energy sources. Lowery’s boss, Energy panel Chairman Jeff Bingaman (D-N.M.), is also a big proponent of an RPS. Bingaman also intends to push an energy bill that includes federal siting authority.

{mosads}“If we are going to need a lot more electricity and if a big percentage of it is going to come from renewable sources like wind and solar, then we need to build a lot of transmission,” Lowery said.

A study done by American Electric Power (AEP) and the American Wind Energy Association estimated it would cost $60 billion to build a high-voltage interstate power system that could allow wind to provide as much as 20 percent of the nation’s electricity needs.

“The nation’s bulk transmission system is currently inadequate to deliver energy from remote wind resource areas to electrical load centers,” according to an AEP summary of the study. In other words, Tomasky said, “The wind isn’t where the people are.”

But Tomasky acknowledges that the arcane issue of siting authority elicits strong feelings among local officials and landowners who don’t want power lines in their backyards.

“People don’t seem to like transmission lines near where they are. They don’t like to look at them,” Tomasky said. “A mountain with a transmission line isn’t as pretty as a mountain without a transmission line. Even I will concede that.”

Federal regulators would be better able to gather all the interested parties in a project and try to find some workable compromise that ensures landowner concerns and energy needs are in balance, she said.

Another obstacle is deciding who will pay for the transmission lines. State officials have been reluctant to add to their consumers’ electricity bills for a project that will principally benefits another state’s citizens. Transmission is a relatively small part of a bill, but the ability to allocate costs in some fair way will be key to winning more support for broader siting authority.

“We’ve got to come to some agreement on some hard things,” Lowery said.